Why This Matters to Distributors: Distributors continue to outperform many manufacturing sectors on revenue growth, but rising costs, tariff uncertainty, labor shortages, and supply chain disruptions remain significant threats to profitability. The findings suggest distributors are relying increasingly on pricing discipline, operational efficiency, and technology investments to protect margins in a slower-growth environment.
Distribution and logistics companies posted the strongest revenue growth among manufacturing and industrial sectors in 2025, according to Citrin Cooperman’s 2026 Manufacturing and Distribution Pulse Survey, even as executives continued to navigate inflation, tariff volatility and rising operating costs.
The survey of more than 500 manufacturing and distribution executives found that 89% of distribution and logistics companies reported revenue growth in fiscal 2025, the highest rate among all sectors surveyed. Across all respondents, 80% reported revenue growth, up slightly from 78% a year earlier.
The results point to an industry that remains resilient but is growing at a more measured pace than in recent years.
“Manufacturers and distributors entered 2026 on firmer footing than the most disruptive years of recent memory,” the report said, although tariff-related cost volatility, supply chain risks and margin pressures continue to challenge businesses.
While revenue growth remained widespread, the pace of expansion continued to moderate. Only 15% of respondents reported significant revenue growth, down from 17% the previous year and 49% in 2024. Similarly, 75% reported year-over-year growth in earnings before interest, taxes, depreciation and amortization, or EBITDA, compared with 77% the previous year.
The findings suggest distributors are generating growth through operational improvements and pricing discipline rather than broad-based market expansion.
Among companies reporting EBITDA growth, 38% cited stronger product demand as a primary driver, while 37% pointed to higher revenue and 35% reported improved margins. 30% said they successfully passed higher inventory and supply chain costs on to customers.
Cost pressures, however, continue to weigh heavily on profitability.
Among respondents reporting EBITDA declines, 40% cited rising overhead costs, including labor and insurance expenses, as the leading cause. One-third said declining demand hurt earnings, while another one-third said they were unable to pass rising inventory and supply chain costs through to customers.
The survey found that distributors entered 2025 facing an already elevated cost environment that became more challenging as tariff uncertainty increased.
Many companies accelerated inventory purchases ahead of anticipated tariffs, filling warehouses and third-party logistics facilities while increasing storage and fulfillment costs. At the same time, wage pressures remained elevated despite slower hiring activity, particularly for skilled technicians, warehouse workers, and logistics personnel.
Insurance, transportation, and technology expenses also continued to climb.
Supply chain concerns remain a major challenge despite improvements from the disruptions that followed the pandemic.
When asked to identify their biggest business hurdles, respondents ranked supply chain challenges as the top concern, cited by 25% of executives. Rising inflation followed at 23%, while 22% pointed to the prohibitive cost of capital.
The report noted that executives are increasingly planning for multiple economic scenarios rather than relying on a single forecast, reflecting ongoing uncertainty surrounding trade policy, geopolitical conflicts, and commodity markets.
Technology investment also remains a priority.
The survey identified digital transformation and artificial intelligence as key areas of investment, with companies increasingly viewing technology as essential to improving efficiency and maintaining competitiveness. However, workforce adoption remains a challenge. Twenty-two percent of respondents said their employees’ ability to embrace and use new technologies was a significant business concern.
Citrin Cooperman said technology spending has shifted from a discretionary expense to a business necessity as companies invest in automation, cybersecurity, and data infrastructure.
The report concludes that distributors remain financially healthy but face a more complex operating environment than in recent years.
Distribution and logistics companies continue to lead the broader manufacturing sector in growth, but executives must contend with persistent inflation, labor shortages, tariff uncertainty and rising operating costs. As a result, many are focusing less on rapid expansion and more on protecting margins, improving operational efficiency, and building greater resilience into their supply chains.
For distributors, the survey suggests that success in 2026 will depend not on explosive growth but on the ability to manage costs, adapt to changing market conditions and invest strategically in technology and operations.
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